Since the beginning of the last century, automobile companies have fought for control of a quickly expanding market in the newly created automobile industry. Hundreds of companies attempted to secure their place in market but ultimately, only three companies remain today (Wright, 2012). The decisions, mergers, and products those three companies made is ultimately what kept them going. Starting a business and ensuring its success are two different things entirely. A successful business will recognize the need to adapt to the various pressures exerted on it from other forces.
Merger Activity Fuel efficient and eco-friendly vehicles are among the recent consumer trends within the automobile industry. The risk of new carmakers entering the marketplace is relatively low because of the high economic and political barriers that exist in this industry. A recent example of a company who has succeeded in entering the marketplace with a new product is Tesla Motors. The car company is still in its infancy; however, they have designed and delivered several all-electric vehicles to the marketplace using a platform they created. The original models produced by Tesla Motors range from $50k - $110K, making the vehicles out of reach for the majority of consumers. According to their original business plan, they were to build a sports car, using that money build an affordable car, and with that money build a more affordable vehicle (Gertner & Kratochwill, 2012). The company has so far completed two of their business objectives; therefore, it would be safe to conclude the company will not be going away any time in the near future. New carmakers are an extremely rare occurrence in this market because of the ability the current manufactures have to meet customer demands. Tesla Motors is the exception, not the rule. The car industry is one that changes often because consumers’ wants and needs in a vehicle